Marketers have come to rely on demographic solutions to establish patterns and trends about the purchasing habits of customers and how these habits relate to purchases, demographics, and other factors. Alongside companies' proprietary databases, third party data warehouses have evolved, fashioned by many companies who share information either about specific customers or about data extracted from their customer bases. In both cases, advertisers use the derived information to generate observations relating to their markets, target individuals to different types of offerings and select appropriate media purchases for advertising.
In the case of video advertising media, e.g., video tapes that are mailed, internet video streams, or broadcast television (whether via terrestrial, cable, satellite, or any other distribution medium) advertising—there are only limited means to produce and/or deliver personalized versions of the advertisements that directly take advantage of the information available about consumers purchasing habits and the like. Mostly, this reflects the nature (such as bandwidth constraints) of the traditional delivery media for video, which provide very limited capability to deliver anything more than a common message.
FIG. 1 shows the global layout of a broadcast delivery chain as deployed today. In this model, each source has a separate channel to all receivers (which can be separate set-top boxes, televisions, etc.). The same information is send to all receivers. If someone wants to create a source that must only go to a subset of the receivers, they must create a new channel and limit the receivers to only receive that channel they are entitled to show. Personalization creates different variants of the source for different receivers. Potentially this can lead to a different variant for each receiver. Adding personalization to this model would mean that, worst-case, every source would need a separate channel to every receiver, which is impossible under the current bandwidth limitations. Basically every user would need a high bandwidth point-to-point connection to the source. Although current VOD (video on demand) systems deployed on digital networks provide high bandwidth channels to viewers, these systems are still very expensive, and can only serve a limited percentage of the total subscriber base simultaneously. Thus, within the currently existing bandwidth constraints, only a few different variations of the same channel can be transmitted simultaneously, allowing personalization only for a few viewers, or very limited personalization for large groups of viewers. This makes the tradeoff between bandwidth lost and capabilities gained not interesting enough. There really must be a higher level of personalization for a larger amount of viewers with the same bandwidth tradeoff before this becomes interesting.
In addition to the limitations imposed by the delivery medium, no advertiser is going to create/produce many different versions of one and the same message, simply because there is no time and/or resources to create the required diversity. The nature of video production, focused typically on one sequential video story, does not allow for incremental content changes. This forces advertisers to avoid topically relevant information and offerings.
As such, even though companies know a tremendous amount of information about their customers, the ability to leverage this information has been limited by the nature of video creation/production and the fundamentals of the broadcast medium, requiring a bland vanilla message to be sent to all customers.